Downingtown eyes vote on 0% tax hike

EAST CALN — The Downingtown Area School Board will vote on adopting a final budget with no increases in taxes for the 2013-14 school year during its meeting on June 12.

“I think everybody in the community will be very appreciative,” said board member Jacqueline Fenn.

A budget for the 2013-14 school year must be voted on by the board by the end of June. The proposal to not increase taxes was announced by the district on May 30, prior to which the drafted budget featured a 1.17 percent tax increase.

If the $195 million budget is adopted by the board, the current property tax rate, which is set at 27.182 mills, would be maintained for the following school year.

“The superintendent and the board’s goal is to put forth a budget without a tax increase and not have any negative effect on academic programs,” said Chief Financial Officer Richard Fazio.

During a board meeting in May, members asked if the administration could find a way to secure a zero percent tax increase.

During the meeting, the board will consider five separate resolutions regarding next year’s budget, including adoption of the budget, no increase in real estate taxes, the Homestead Exclusion, and appointment of a tax collector.

Although a new budget is subject to a 30-day public review period, because the change in proposed tax increase does not exceed the Act 1 index for the maximum tax increase allowed by the state, the board will be able to vote on the budget at its next meeting.

Some highlights in the new budget include shared cost containment, the new four-year labor contract with the teacher union, and use of the district’s reserve fund.

According to Fazio, some staffing levels were decreased through attrition, where an employee leaves or retires from the district and the position is not immediately filled by a new hire.

“We determine the need to justify that position to try to avoid laying people off or terminating them,” Fazio said.

The district also ratified a new labor contract with the Downingtown Area Educators Association earlier in May. In spite of earlier concerns from some board members that retroactive salary raises would hinder the budget, concessions regarding health care seem to have aided the district.

“The salary increase impact on the budget was (about) $1.5 million,” Fazio said. “A large portion of that was offset by plan design savings and increased employee contributions to health care.”

The district, which has not historically relied heavily on its reserve fund, will use about $4 million from its reserves, although prior to the announcement, the district planned to use about $2 million.

“We felt comfortable that by using the reserves we could eliminate the need for a tax increase,” Fazio said. “I think the board recognized that, frankly, it was time to really consider the taxpayers of the district and not to have a tax increase. We felt that was one way of achieving it.”

The district currently has about $30 million in its reserve fund and more than $20 million in its general fund.

According to Fazio, the district also expects to see continued modest growth in the area, anticipating an additional $2.2 million in revenues from taxes for 2013-14. The re-evaluation of expected revenues also helped the administration in finding a way to offer the zero percent tax increase.

Revenues are deposited into the district’s general fund and if at the end of the year there is a surplus of funds, the district has the option of transferring it into its reserves.